On June 29, 2024, Indian conglomerate ITC announced a huge 12% increase in consumer spending on its FMCG products. With this, it reached nearly INR 32,500 crore in the fiscal year 2023-24. This growth shows that ITC is expanding its footprint in the FMCG sector. With the help of branded packaged foods, personal care products, education items, incense sticks and safety matches, ITC is planning this strategy.
Growth and Expansion in FMCG Segment
ITC’s FMCG portfolio comprises over 25 top-tier Indian brands. ITC has seen excellent growth despite challenges in the macroeconomic environment. For the continuous development of ITC, key brands like Aashirvaad, Bingo, Sunfeast, Classmate, YiPPee, Fiama & Mangaldeep have contributed significantly. ITC now reaches over 25 crore households across urban and rural India. This is up from 23 crore households in FY 2023.
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Financial Performance and Strategic Initiatives
For the fiscal year ending March 31, 2024, ITC’s FMCG segment recorded revenues of INR 20,966.83 crore. With this, ITC marked a 9.6% increase from the previous year (FY 23). FMCG segment’s EBITDA grew by 19.7% to INR 2,338.50 crore. The main reasons for this growth are strategies such as portfolio premiumisation, efficient supply chain management and strategic pricing actions. Despite inflationary pressures, ITC managed to improve margins by 94 basis points.
Positioning in the Packaged Foods Market
ITC has surpassed Britannia Industries to become India’s second-largest listed packaged foods company by sales. Now ITC is trailing only behind Nestle in this race. ITC’s foods business reported consolidated sales of INR 17,194.5 crore for FY24. This growth is driven by strong performances in categories like atta, biscuits and salty snacks. All these categories saw a double-digit growth rate this year.
Executive Compensation and Corporate Governance
In FY24, ITC saw an increase in the number of executives in the “crorepati club”. There are 68 executives drawing annual remunerations exceeding INR 1 crore. This reflects the scale of ITC’s operations and its competitive positioning across various business segments. ITC’s remuneration policy is led by the market. It includes sustainability goals as a main factor in determining executive compensation.
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Future Outlook
Looking ahead, ITC remains focused on scaling up its FMCG businesses. ITC does this by creating and using its strong brand portfolio, consumer insights, innovation capabilities and resilient supply chain. ITC aims to continue its growth trajectory through strategic initiatives. It is trying to enhance its market presence in both domestic and international markets.
ITC’s performance in FY24 highlights its growth and strategic ability amidst challenging market conditions. ITC is reinforcing its position as a key player in India’s FMCG sector.
About the Author
Mr. Radhesh Tarang Shah, is a management student at Institute of Management, Nirma University. He has a passion for writing articles and poems. He has experience as a financial analyst, author, news writer, marketer and social worker.
